Report of Second National Commission on Labour:
-- V. Shankar and S. Kumaraswamy
The much-awaited report of the National Commission on Labour was recently released by the central government. The report runs into 1700 pages and has naturally kicked off many controversies along expected lines.
The First Commission on Labour headed by P.B.Gajendragadkar was formed in 1966 to make labour laws consistent with the then dominant discourse of mixed economy. India was still in the Nehruvian era of socialistic rhetoric and the commission’s declared focus was on improving the living conditions of workers, providing legal protection to the work force, etc.
The Second National Commission on Labour was constituted after three decades in a different backdrop of liberalisation, privatisation and globalisation (LPG). Its task was to free labour laws from all ‘unwarranted remnants’ of pro-labour provisions so that the requirements of the LPG era can be best fulfilled. The commission of course euphemistically describes this objective as “rationalization of labour laws and formulation of an umbrella legislation to provide minimum protection for the unorganized sector workers.”
While there is every reason for the employers and the bourgeois government to praise the commission, the working class has no other option but to oppose tooth and nail the recommendations of this anti-Labour Commission. Interestingly, the 1700 page report has an 18 page long note of dissent by C.K.Saji Narayanan, a representative of BMS. Because, it has turned out to be a report of an ‘Anti-Labour Commission’. This Second Commission was constituted for the purpose of making the laws consistent to the process of globalisation and liberalization.
The First Labour Commission believed in creation of industrial democracy as a pre-requisite for the establishment of a ‘socialist’ society. But, even an ‘industrial democracy’ compatible with a bourgeois-democratic framework is considered to be a hurdle for the current reforms. The Second Commission advocates ‘social partnership’. This paradigmatic shift from ‘industrial democracy’ to ‘social partnership’ is itself an indication of the government’s approach towards labour restructuring in the context of the ongoing industrial restructuring. The commission has agreed with the demand of the industry to withdraw the role of the state in labour affairs and leave the destiny of workers to be decided by the employers. The concept of social partnership which revolves around phrases like ‘labour-management relations’ and ‘cooperation’ in place of ‘disputes’, ‘conflicts’ and ‘confrontations’ is intended to conceal the fundamental real-life conflict between capital and labour in a capitalist society.
Again, the term ‘productivity’ is used more in relation with labour than capital and the task of enhancing productivity is thus bestowed primarily on labour. Attaining international competitiveness and increasing productivity is the new buzzword and the Commission has taken it upon itself to remove any hurdles in the way of achieving this motto. On this basis the Commission has attempted to evolve a comprehensive administrative and legal framework for labour reforms. Needless to say, such reforms are aimed precisely at making the industry more competitive by leaving the work force still more unprotected.
The first and foremost recommendation of the Commission is the redefinition of the concept of job. It says that the prevalent concept of job that is always looking for permanency and legal protection is obsolete in the environment of liberalization. So, it presents the concept of contractual employment as being more in tune with the changed circumstances. In this process, it first proposes to render the organized workers unorganized before advocating an umbrella legislation to cover the unorganized workers who currently account for 92% of the work force.
The security proposed by the Commission is not job security but some kind of social security in the form of meagre financial assistance till the retrenched, laid-off worker hopefully finds a new job. The Commission has reiterated the government’s position of invoking a ‘hire and fire’ regime, giving a free hand to the employers. The Commission feels that the industrialists must have the flexibility to adjust their workforce to the requirements of economic efficiency. The employers need not get any permission from the government for retrenchment and lay-off. Now the Commission has also proposed to exempt all employers employing not more than 300 workers from seeking government clearance before closing down their units. In other words, the Commission proposes to take around 90% of economic establishments in the country out of the purview of the applicability of any labour law. Moreover, the Commission has also reiterated that the permission will be deemed to have been granted if the government failed to respond within 60 days of submission of the application for closure. The recommendations have also made section 9A of the Industrial Disputes Act redundant and have given complete freedom to the employers to effect any change in working conditions even without notice. The report of the Second Labour Commission has thus given a blanket approval to some of the long-standing demands of the industry.
The Commission claims to have studied the experiences of some of the major strikes in last two decades including the historic 2 year long textile strike in Bombay in 1982, the long drawn out public sector strike in Bangalore in 1981 and the recent experiences of workers’ struggles in BALCO, electricity workers’ struggle in UP, and so on and so forth. etc. in formulating its recommendations. Indeed, the report acknowledges the fact that out of 210 million man-days lost in the decade of 1990-2000, i.e, the post-reform period, only 10% can be attributed to labour problems. Yet, instead of emphasising the need to discipline employers, the Commission is desperate to discipline the working class and curtail its rights to organise and protest.
By raising the bogey of multiplicity and fragmentation of trade unions, the Commission actually seeks to prevent the trade unions from elevating their demands and struggles to the level of government policies. It bluntly suggests that issue-based ‘struggle committees’ and ‘joint actions’ should be discouraged as they tend to raise workers’ demands to the level of government policies. To this end, it prescribes a sharp increase in the membership required for trade union registration and introduces complicated and cumbersome procedures for trade union recognition. It also proposes to treat federations or central organizations of trade unions on a level at par with primary trade unions. It also cautions trade unions against using trade union funds for political purposes insisting on the creation of separate political funds for such purposes. The report also calls for a ban on craft- and caste-based trade unions. In that case, most of the trade unions in sectors like railways will stand prohibited. But who has given the Commission the power to usurp the workers’ inherent right to form a trade union, and decide its nature and functions?
Strike is the spectre that has all along been haunting industrialists and their well-wishers of all kind. The Commission too seems to have lost all its balance on this score. It suggests that strikes can only be organized after a secret ballot in which at least 51% of workers support the call. In essential services, the Commission is of the opinion that a strike should be deemed to have taken place with the successful holding of a strike ballot and then the issue should be referred to compulsory arbitration. The distinction between the virtual and the real seems to have already been blurred for the Commission. It is nothing short of a cold-blooded murder of the ‘right to protest’ which is central to any notion of democracy. The Commission also treats recognized forms of struggles like ‘Go-Slow’ and ‘Work to Rule’ as sheer misconduct!
The Commission admits to have harboured an erroneous idea about China. It thought flexible labour laws were the secret behind China’s magical economic growth. It also thought that labour laws were not applicable in Export Processing Zones. There were suggestions from various quarters to transplant Chinese labour laws to India. The Commission then made a trip to China and found that all those ideas were wrong. They found that neither domestic nor foreign industry in China was exempted from labour laws. Even export zones were not exempted. The Commission found neither a ‘hire and fire’ regime nor a licence-permit raj in China. It rather found that all workers were well protected with social security schemes and also with job security, of course, in a typically Chinese way.
The report says that China did not blindly follow the standard prescriptions laid down by the World Bank and the International Monetary Fund for developing economies. China followed a different sequence of reforms. Instead of initiating reforms in the sphere of foreign trade and exchange rate liberalization, China started with agriculture and then went on to introduce export orientation for Township and Village enterprises before setting up Special Economic Zones which offered foreigners excellent infra-structural facilities. A new policy was first tried in a small region, and after closely monitoring the experience including the difficulties encountered, the policy was introduced with modifications in a wider area. After making this observation, the report retorts: “Perhaps those who advised us to recommend labour laws similar to what China has, may have second thoughts after seeing the provisions in the Chinese laws that we have quoted because the kind of freedom that they thought the entrepreneur had in China is not found in the laws as they exist”.
The Commission waxes eloquent about creating a new mindset of social partnership and a new work culture. The starting point for a new work culture is to cut down the number of holidays and the road to a new mindset passes through a changed mode of employment, i.e., reconciling workers to the notion of contractual employment devoid of any permanency.
The commission has proposed a new legislation called ‘Labour Management Relations Law’ in place of existing legislations like Industrial Disputes Act, 1947, Trade Unions Act, 1926, Industrial Employment (Standing Orders) Act, 1946, Sales Promotion Employees (Conditions of Service) Act, 1976, etc. The new legislation proposes a redefinition of ‘worker’ that excludes all supervisory staff, not just managerial, and thereby excludes a considerable section of workers who are covered by the existing laws. Moreover, a decision on the categories of workers who would be covered under labour law is left to the discretion of the government. The government is expected to announce a list of categories of workers to be covered by labour law. The report also proposes a separate legislation for workers in small-scale units.
The trade unions that have at least 10% or 100 membership will be allowed only to represent individual cases in various fora for purposes like conciliation, arbitration, etc., while those unions who have 66% of membership will alone be considered as a ‘Negotiating Agent’. In case of no union having 66% of membership, a ‘negotiating college’ comprising trade unions with at least 25% membership will be constituted. In this process, the proposal effectively nullifies the workers’ and their trade unions’ right to recognition. The worst thing is that the check-off system is being made mandatory and the strength of a trade union will no longer be decided on the basis of voluntary submission of membership fee by workers. Only in establishments employing less than 300 workers will the issue of recognition be settled through secret ballot. Moreover, in the check-off system workers will not be able to switch over to another union for a period of 4 years. In other words, a trade union will continue to enjoy exclusive recognition for a period of 4 years even if it loses its influence among workers in the mid way.
The report has expressed deep concerns about workers in the unorganized sector. There are of course some welcome recommendations in this regard like the proposed provision for formation and registration of trade unions of unorganized workers even where there is no ‘employer-employee relationship’ and the proposal to declare a floor level minimum wage at national level. However, despite agreeing on principle with the Study Group’s proposal to declare a minimum wage equivalent to the one prescribed by the Fifth Pay Commission for workers in the lowest cadre of government service (Rs. 2100 (Basic) + Rs. 2400 (DA) = Rs. 4500), the Commission has rejected the idea once again on the basis of what it calls consideration for the employers’ ‘capacity to pay’.
The broad parameters of the legislation for unorganized workers concern minimum wages, job security, safety and security. But, the only concrete proposal is formation of an ‘Unorganised Workers Board’ with constituent bodies down to the level of Panchayats. Employers having more than 5 workers should ensure that the workers are registered with the board and that necessary Identity Cards are issued.
But, the question remains as to how such provisions would be implemented in real life while the workers of this sector are totally unorganized.
Secondly, any welfare legislation will remain only on paper as long as it is not backed by a proper monitoring and implementing mechanism. Another proclaimed area of concern for the Commission is the welfare of women and children. The Commission has recommended strengthening of Membership Based Organisations (MBO) among women and allowing such MBOs to be registered under the Trade Unions Act. It also expects MBOs to function as an agency for implementing government schemes. The commission has recommended a statutory scheme for the implementation of maternity entitlements to cover all women with an emphasis on extending it to the unorganized sector. The contributors for the scheme would be the employees and the government. To abolish child labour, it recommends convergence of laws and schemes on child labour and education.
The data available in regard to workers who are part of the trade union movement and, thereby, have some access to social security, indicate a strength of around one million. This constitutes a very small proportion in relation to a non-agricultural work force of about 150 million.
Coverage under the Employees’ Provident Fund (EPF) Scheme and the Employees’ State Insurance Corporation (ESIC) Scheme is reported to be limited to 19 million and 7 million respectively, which again is a small fraction of the non-agricultural work force.
The Commission wants to redesign social security measures in a way that neither the state nor the employer would have little or no liability on this score. Perhaps, it has taken the cue from the experiment of ‘Self Help Groups’ that lend money on interest to the members from out of funds raised from its own members. The concept of pension is also being reinterpreted as savings linked deposits. Gratuity Act and PF Act are to be clubbed to create a social insurance scheme to be operated by the Employees’ Provident Fund Organisation as an integrated insurance scheme to provide gratuity, unemployment benefit, lay-off and retrenchment compensation etc.
Is the trade union movement in India prepared to confront the consequences of the ongoing process of restructuring of capital and labour? Do not trade unions require a reorientation in the face of the ongoing process of restructuring of capital and labour?
Of course, trade unions need to be reoriented in the phase of liberalization and globalisation. But, such a reorientation has to be aimed at protecting the hard earned rights of workers, offering maximum protection to the working class from the onslaughts of capital and not sacrificing the interests of workers at the altar of capitalist competition. It has to.stress innovative forms of struggle, methods of running trade union that can involve broad masses of workers and creative strategies to confront the reform process, including the proposed labour reforms. And equally urgent is the task of reaching out to the hitherto neglected section of unorganized lot of workers and women.
Contrary to its own wishes, the recommendations of the Second National Commission on Labour, if implemented, are likely to open up a new chapter in the history of the Indian working class movement. While more and more sections of the organised working class are being shaken up from the stupor of complacency and economism, accelerated entry of unorganised workers and women workers in the trade union arena is bound to strengthen and energise the movement as a whole. Politicization of trade union movement has become an objective possibility in the changed circumstances and no amount of legislations can halt it. Rather, they can only open up new avenues and new forms of struggle. It is now the task of trade unions and the working class movement to suitably reorient and restructure itself to take on the challenges and seize the initiative.